History’s smallest billionaire? Meet the tiny titan who was, briefly, the richest man alive

During the final decades of the 19th century, the United States experienced a transformation of epic proportion. It was a period dubbed the Gilded Age, a term borrowed from a satirical novel by Mark Twain that captured a society whose glittering wealth concealed deep social tensions.

Between the end of the Civil War in 1865 and the turn of the century, the US became the world’s leading industrial power. New railroads stitched the country together, new technologies revolutionised manufacturing and finance, and a small group of entrepreneurs accumulated fortunes on a scale previously unimaginable.

Among these magnates, names such as oil baron John D Rockefeller, banker JP Morgan and railroad tycoon Cornelius Vanderbilt, was Andrew Carnegie.

Physically, Carnegie barely reached the shoulder of his rivals, but his influence was colossal. By perfecting the large-scale production of steel, the material that made skyscrapers and transcontinental railways possible, Carnegie helped define modern America.

“He is, I think – and I don’t think this is an exaggeration – the central figure in what we call the Gilded Age, the age of the robber barons, the age of the moguls, the age in which the United States leaps from being a rural backwater to being an industrial manufacturing powerhouse,” says Carnegie biographer David Nasaw on the HistoryExtra podcast.

What was it within Carnegie that made him so successful? His small stature, and his broader drive to smash the obstacles laid before him, could provide the answer.

Small in stature, large in strategy

Carnegie’s business reputation as a giant of industry contrasted sharply with his size.

Nasaw discovered that the steel magnate’s height was something he worked to disguise.

“He’s a tiny little man,” Nasaw explains. “I wondered why he’s always wearing a tall hat, and why there are no pictures of him with other people, except when they’re on stairs and he’s sitting on the top stairs and everybody’s sitting on a stair below him. And I wondered why, when he goes on dates in New York City, they’d go horseback riding in Central Park. And then I looked at his boots, and he’s always got these high boots. And the reason is, he’s about 4 ft 10 in, or 4 ft 11 in.”

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But it wasn’t just his height that Carnegie sought to compensate for. There were other obstacles, and his path to great wealth was far steeper than that of his contemporaries.

“The American robber barons, the Rockefellers and the Morgans, and the Goulds, they all come from lower-middle class backgrounds. They all have some kind of education. They have some kind of family money. Carnegie is the only rags to riches story,” Nasaw says.

Born in 1835 in Dunfermline, Scotland, Carnegie was the son of handloom weavers. The Industrial Revolution’s new textile factories were destroying these traditional craft livelihoods. Economic hardship and the lure of American wages persuaded his mother to emigrate with the family to Pennsylvania in 1848.

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Twelve-year-old Andrew worked first in a textile mill and then as a telegraph messenger in Pittsburgh. His memory for names and routes soon brought him to the attention of the Pennsylvania Railroad, the most advanced corporation of its time. There, executive Thomas A Scott mentored him, teaching the intricacies of railroad finance and operations.

Through insider investments in rail suppliers and bridge companies, Carnegie accumulated capital while absorbing lessons about the partnership between industry and government that would define the Gilded Age.

Building the steel backbone of America

“He comes from nothing,” Nasaw explains. “So he understands that if he’s going to make his way in this new land of America, he’s got to be smarter than everybody else, and he’s got to be one step ahead of everybody else.”

Carnegie applied that foresight to the emerging steel industry. The Bessemer process, an innovation from Britain to more easily remove impurities from pig iron, made it possible to produce high-quality steel quickly and cheaply. Carnegie poured profits back into new mills that embraced this technology, lowering costs and outpacing rivals.

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By the early 1890s his Carnegie Steel Company was the largest and most efficient in the world, supplying the rails for transcontinental trains, the beams for Chicago’s first skyscrapers and the steel plate for the US Navy’s modern battleships. When financier JP Morgan bought the firm in 1901 for $480 million (around $18 billion today), it became the core of US Steel, the world’s first billion-dollar corporation, and Carnegie was briefly the richest man alive.

Ruthlessness born of necessity

But Carnegie’s ascent had a darker side. While he did genuinely overcome his obstacles to make his name, he was also brutal to some of those below him.

“I think his family’s lack of wealth gives him another impediment to making it in America, and that adds to his ruthlessness,” says Nasaw. “He’s out for himself, and he has to be because nobody else is going to take care of him.”

That hard edge surfaced during the Homestead Strike of 1892, when workers at one of his Pennsylvania mills resisted wage cuts. Armed Pinkerton agents were brought in to break the strike. The violent clash left at least ten people dead and dozens wounded.

Though Carnegie distanced himself from the bloodshed, his relentless cost-cutting policies had set its stage.

Faith in progress and the Gospel of Wealth

Despite such conflicts, Carnegie retained a belief that industrial growth could uplift humanity – and that stature is measured in much more than inches.

“He still had this optimistic streak. He always believed in progress, that the world was getting better and better. That was his model: things get better. He believed that tomorrow would be a better day,” says Nasaw.

That optimism inspired his 1889 essay The Gospel of Wealth, which argued that great fortunes were not personal rewards, but trusts held for the public good. He insisted that the wealthy must live modestly and use their surplus for “the improvement of mankind”, a radical idea in an era when most millionaires flaunted their riches.

Carnegie tried to give his money away faster than compound interest could replenish it. He funded more than 2,500 public libraries across the English-speaking world, endowed universities such as Carnegie Mellon, supported scientific research and established the Carnegie Endowment for International Peace.

David Nasaw was speaking to Elinor Evans on the HistoryExtra podcast. Listen to the full conversation.

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